Paying Taxes in Canada

[purem4g1c 113]

46 minutes ago, KristineGB said:

So update, I hired an accountant. 

 

We filed as a person who left Canada and will let CRA review that. His exact words, "It sounds like we file as someone who left canada during the then the cra looks it all over and makes a decision eventually. 

 

Tips for the first page on the paper form. I called CRA about this. If you're in a similar situation as me (see original post):

 

1. On where I am on December 31, 2019 I put Ohio, USA. 

2. For SIN, I put no SIN. You can also put 000-000-000. 

3. For the question about spouse's income, I put "No Canadian income. Spouse is an American citizen who has never been a resident of Canada". 

 

Obviously, I have not filed yet so we don't know how this will turn out. I will update if I get a response from CRA or once my refund is in the bank. 

Yeah, I didn't see an exit taxes box but we could be using a different form than what you used. My accountant said we are filling as someone who has left Canada and will let CRA decide.

hmm - interesting. I don't really want to leave it to "luck" though? if they decide to make you a resident of canada you may owe taxes to both US + Canada?

[KristineGB 56]

1 minute ago, purem4g1c said:

hmm - interesting. I don't really want to leave it to "luck" though? if they decide to make you a resident of canada you may owe taxes to both US + Canada?

Yeah, actually, I was thinking about it and consulted with some people and I may submit the NR73 along with my tax return. Thanks for reminding us about this!

[purem4g1c 113]

I am filling it out as we speak, will fax it or mail it today. Sigh, this stuff is lame lol

[KristineGB 56]

Just now, purem4g1c said:

I am filling it out as we speak, will fax it or mail it today. Sigh, this stuff is lame lol

It's tedious too. Life has become complicated since I married a USC. Lol. This better be worth it! j/k

[MeghanK 629]

We are working on our taxes today and are soooo out of the loop lol. Husband just finished his Canadian taxes (looks like he did everything as suggested here) and we have an appt with h&r block to help us figure out how to file in the u.s. I need an adult!

[HF & HB 6]

Hi MeghanK,

 

I was hoping I could ask you about how you guys did your Canadian and US taxes since our timelines are similar. I entered on a K1 July 15, 2019 (married the next day, currently AOS pending). I pass the substantial presence test so I'm understanding I'm a US resident for tax purposes ( I visited a lot before moving here). What about the 6.5 months I lived in Canada prior to moving here? Did your husband mark his residency in Canada for tax purposes as non-resident (as of  what date?) or deemed non-resident? Just curious to see how you guys understood the residency requirements for both countries.

 I'd also love to hear about your experience with H&R Block if you don't mind. We visited a local branch recently and we're are still unsure whether their going to be a good fit for our situation. 

 

Thanks for reading all this !   I know it's a lot, much appreciated !

Edited March 10, 2020 by HF & HB

[MeghanK 629]

On 3/9/2020 at 9:51 PM, HF & HB said:

Hi MeghanK,

 

I was hoping I could ask you about how you guys did your Canadian and US taxes since our timelines are similar. I entered on a K1 July 15, 2019 (married the next day, currently AOS pending). I pass the substantial presence test so I'm understanding I'm a US resident for tax purposes ( I visited a lot before moving here). What about the 6.5 months I lived in Canada prior to moving here? Did your husband mark his residency in Canada for tax purposes as non-resident (as of  what date?) or deemed non-resident? Just curious to see how you guys understood the residency requirements for both countries.

 I'd also love to hear about your experience with H&R Block if you don't mind. We visited a local branch recently and we're are still unsure whether their going to be a good fit for our situation. 

 

Thanks for reading all this !   I know it's a lot, much appreciated !

I'm not sure how my husband filed his Canadian taxes. He did those on his own. I believe he put married filing separately and that he was not a resident of Canada on Dec 31 or something? He did exactly what folks suggested to do in this thread.

 

Unfortunately our H&R block person also had no idea what to do and had to "send it to corporate" so we have another appt this Sunday

[KristineGB 56]

1 hour ago, MeghanK said:

I'm not sure how my husband filed his Canadian taxes. He did those on his own. I believe he put married filing separately and that he was not a resident of Canada on Dec 31 or something? He did exactly what folks suggested to do in this thread.

 

Unfortunately our H&R block person also had no idea what to do and had to "send it to corporate" so we have another appt this Sunday

Our H&R Block had to consult a colleauge who works on the Michigan Canada border. We are going to do MFJ here. No need to declare my worldwide income because I wasn’t working here in 2019. 

[HF & HB 6]

Thanks for the updates MeghanK! Yes our HR Block person also had to reach out to other advisers. They're still working on it now. Hopefully it'll all turn out ok!

 

For anyone who may be interested about the Canadian side, my husband and I were on the phone with CRA for about 1.5 hours ( a lot of holds and transfers). After a lot of confusion what they told us agreed with what everyone was saying on these threads which was reassuring. I will however have an accountant in Canada do it for me since I'm still not quite 100% confident in my tax filing abilities. I haven't looked at the tax forms myself therefore I don't want to accidentally confuse anyone, but I want to point out that calling the CRA is pretty helpful to answer case specific questions. They also confirmed for me that yes indeed the day I left Canada (crossed with K-1) was the day I become a non-resident. And I understood from them that for the portion of the year I was a resident and worked in Canada I will be taxed as such.  

[Rotnkid 33]

Adding some information that I collected from reading up (various forums including Serbinski) about Canada and US taxes for the year 2019 for my situation. I came to the US  in May 2019 on a K1 visa. From what I have understood so far, for the year 2019 I am considered an emigrant (and not a non-resident) for Canadian tax purposes. One is considered a non-resident for Canadian tax purposes if they have been a non-resident for the entire year. So I am a non-resident only from 2020 onwards. So as an emigrant, for 2019. I only pay taxes in Canada for the income received during the time I was a resident (unless I elect to file under section 217 to recover some of the non withholding tax on the EI received in the US). 

 

From what I have read for the Canadian tax, completing form NR 73 is optional.  It seems I only have to do the exit tax for the year 2019 and that is sufficient for CRA to know that I have left Canada in 2019 (though I still haven’t figured out how exactly  to fill out some of the information on page 1 of the T1 for the exit tax). When you fill in the departure date you on the T1 form, CRA will take it as your exit tax.  I haven’t done the NR 73 as I read that CRA can classify you as a deemed resident though one is not and then one will have to pay Canadian taxes on worldwide income until they make a change to their classification (which is not easy to do).  So I am planning on not filling that unless CRA asks me to.  

 

ThIs  tax thing is taking the life out of me 😖

 

[KristineGB 56]

1 hour ago, Rotnkid said:

 

ThIs  tax thing is taking the life out of me 😖

 

This whole Marrying a USC and migrating to The US and everything that comes with it is taking the life out of me. Lol. Can you believe this isnt going to be fully over until we become USCs. It is making my migrating to Canada a piece of cake! 

[Rotnkid 33]

2 hours ago, KristineGB said:

 Can you believe this isnt going to be fully over until we become USCs. It is making my migrating to Canada a piece of cake! 

I doubt if this is ever going to be fully over. I understand that once you are a USC, no matter where in the world you move to (retire etc.), you have to keep paying taxes to the US on your world income. Canada does not have this rule.  Canadian citizens do not have to pay taxes to Canada unless they actually live in Canada. 
 

I agree, migrating to Canada was a breeze!

[Nashvan 133]

In response to COVID-19, CRA says the deadline for individuals will be deferred until June 1. Taxes owed deferred until August 31.

https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html

 

IRS fed deadline is still April 15 (July 15 for Tennessee tornado victims) but taxes owed will have an additional 90 day window, interest-free.

https://www.cnbc.com/2020/03/17/treasury-and-irs-to-delay-tax-deadline-by-90-days.html